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2011 Supreme(Bom) 1335

2012 (1) ALL MR 1
High Court of Judicature at Bombay
D.G. KARNIK
Rakesh Gulshanlal Sehgal & Another
Versus
M/s. Modern Products
Notice Of Motion No.2207 of 2010 In Suit No.2838 of 1984
Decided on : 16-11-2011

Advocates Appeared:
For the Plaintiffs:I.M. Vohra i/b Bipin Joshi, Advocates.
For the Defendant:Sanjay Jain i/b L.J. Law, Advocates.

Headnote:LIMITATION ACT, 1963 - Article 137 - Specific Relief Act, 1963, Section 28 - Limitation for application under Section 28 of Act. Since no period of limitation is provided for making an application under Section 28 of Act hence it would be governed by Article 137 of Act.

       Section 28 of the Specific Relief Act does not prohibit contracting out. Clause 4 of the consent terms was an agreement, express or implied, by which the parties have agreed to contract out of Section 28 of the Act. Section 28 of the Act confers a right o n the unpaid vendor to rescind the contract. In spite of that right, the parties by Clause 4 of the consent terms agreed that the defendant (as an unpaid vendor) would have a right to put the property to an auction at the hands of the Court receiver and recover its dues.

       The parties specifically agreed that the right of the defendant as unpaid vendor was only restricted to the recovery of the unpaid consideration under Clause 4 of the consent terms. The defendant therefore cannot claim a right of rescission under Section 28.

       Specific Relief Act, 1963 - Section 28 - Right of rescission of contract. Section 28 of Act confers a right on unpaid vendor to rescind contract.

Judgment :

1. Heard learned counsel for the parties.

2. This motion is taken out by the defendant in the decreed suit No.2838 of 1984, under section 28 of the Specific Relief Act 1963 (for short “the Act”).

3. On 4 August 1984, the defendant agreed to sell to the plaintiffs the suit property for a total consideration of Rs.4,06,000/on the terms and conditions mentioned therein. The plaintiffs filed a suit (Suit No.2838/84) for specific performance of the agreement of sale. On 19 December 1984, the parties settled the matter and filed consent terms in the suit. By an order dated 21 December 1984, the court passed a decree in terms of the consent terms. As per the said consent terms, the defendant agreed and admitted that till date of the signing of the consent terms, it had received the sum of Rs.2,56,000/. The defendant further agreed to receive the balance consideration of Rs.1,42,000/by monthly instalments of Rs.4,000/. The consent terms specify that the “consent terms” were to operate as a conveyance and there was to be a charge of balance consideration of Rs.1,42,000/in the suit property until it was paid in full. Clause no.4 of the decree also provide that in the event the balance payment was not paid, the defendant shall be entitled to apply to the court for appointment of court receiver for sale of the suit property and apply the sale proceeds for payment of the balance consideration of Rs.1,42,000/or unpaid part thereof.

4. According to the defendant, part of the balance consideration of Rs.1,42,000/was not paid by the plaintiffs. The defendant has therefore taken out the motion for rescission of the decree in terms of a right conferred upon it under section 28 of the Act. By filing an affidavit in reply and supplementary affidavit in reply, the plaintiffs have contended that the contention of the defendant that part of the money has not been paid is incorrect. Plaintiffs have paid the entire balance consideration of Rs.1,42,000/. Photo stat copies of the receipts for payment issued by the defendant are annexed as Exhibit A1 to A38 to the further affidavit in reply dated 25 April 2011. By filing a rejoinder the defendant has denied the receipt of balance consideration of Rs.1,42,000/and has contended that three of the cheques of Rs.4,000/each issued by the plaintiff have been dishonored by the bank and thus, there is a short payment of Rs. 12,000/. Counsel for the defendant further submitted that some of the instalments were not paid in time and that is also a ground for rescission under section 28 of the Act. In response, counsel for the plaintiffs submitted that Rs.12,000/in respect of three cheques which were dishonored has been paid in cash and the receipts for payment of cash are produced at Exhibit A12, A14 and A6.

5. In my view, the defendants are not entitled for rescission of the contract under section 28 of the Act for the reasons indicated below.

6. Sub-section (1) and (2) of section 28 are relevant for our purpose and read thus:

(1) Where in any suit a decree for specific performance of a contract for the sale or lease of immovable property has been made and the purchaser or lessee does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor or lessor may apply in the same suit in which the decree is made, to have the contract rescinded and on such application the court may, by order, rescind the contract either so far as regards the party in default or altogether, as the justice of the case may require.

(2) Where a contract is rescinded under sub-section (1), the court

(a) shall direct the purchaser or the lessee, if he has obtained possession of the property under the contract, to restore such possession to the vendor or lessor, and

(b) may direct payment to the vendor or lessor of all the rents and profits which have accrued in respect of the property from the date on which posses



















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